Most use a magnet in the bit holder. That magnetic force carries through the bit and the screw like when you used to pick up a chain of paperclips with one magnet in elementary school. The newer ones have a magnetic sleeve that goes around the bit and has some wiggle to it to adjust for different bits/screws.

How do you make a drill bit magnetic?

Instead of buying new sets of magnetic tipped screwdrivers, you can magnetize your existing screwdriver using a rare earth magnet or any other large magnet. Simply brush the end of your screwdriver across the magnet a few times, and voila, you've magnetized it!

Are Dewalt drill bits magnetic?

DEWALT manufactures its bits from hardened high-speed steel. ... The bits are also magnetic to aid in setting and retaining screws. The set includes a wide array of the most commonly used drill bits, a bit holder, two nut drivers, and a magnetic sleeve.